Austrian Airlines had a cozy, almost quiet existence in what was, undeservedly, a relative aviation backwater.
Vienna used to be quiet. Flights to long haul were, and still are dominated by connections to Munich and Frankfurt in Germany.
Austrian trudged around its own country and near neighbours, an unremarkable Lufthansa subsidiary.
And then Brexit happened and everything changed.
Brexit? Austria? easyJet decided, because of the change in aviation rules that Brexit would mean in the U.K., that it would base its European operations – and even eventually its HQ if it became necessary, at Vienna, for the very reason it was so quiet and desperate to attract more business.
Within months easyJet started transferring over 100 aircraft to the Austrian register and based many of them at Vienna for European operations.
AirBerlin’s collapse sent its Austrian subsidiary NIKI into the hands of a original founder Niki Lauda, and then in months it became a subsidiary of RyanAir as Laudamotion.
Miffed by its inability to purchase NIKI, IAG, launched LEVEL, its own low cost operation into Vienna.
If that wasn’t enough Lufthansa’s own low cost arm Eurowings, was poaching Austrian customers from Vienna and other airports.
Vienna went from a quiet backwater to a vicious low cost battleground and Austrian was stuck in the middle.
Having just gotten back to profitability the airline was facing the need for radical restructuring and cost savings or face hideous losses.
And that’s now what it’s doing, and it is radical.
Every base in the country except Vienna is being closed. Staff will be offered jobs in Vienna and it expects to loose 700-800 staff through natural losses.
All of its turboprops will go. They’ll mostly be replaced by A320’s. Unprofitable routes like Miami are being slashed.
All of its flights from non-Vienna airports to German hubs (for example FRA-Salzburg that I use quite often) will be transferred to Lufthansa in full. Only the busy Vienna-Frankfurt route will be shared. Anything else will go to Eurowings.
On European routes it will aim to cater for direct flights to Vienna, maintaining its premium service where possible and flying routes with little or no competition.
It’s strategy is that it isn’t going to give an inch at Vienna, it’s willing to fight for its routes and maintain its service because it believes not everyone wants to fly low cost. And that’s mostly true. But finding enough passengers on short haul routes, where price is often seen as the principle defining issue, isn’t going to be easy.
On long haul, Austrian constantly struggles. It has old aircraft – just six of each 767-300ER’s and 772’s. And the product isn’t exceptional. Lufthansa Group won’t let it buy new aircraft until it’s fully profitable again, and in reality I suspect Lufthansa is quite happy providing a wider set of routes and filling its own aircraft with Austrian passengers, than loosing them to a domestic partner airline.
Austrian is no Swiss International – Vienna is an amazing city, Austrian is a good airline, with great staff and a good product. It’s got a great plan to hold its own and it’s going to be tough, but Lufthansa has to give it some leeway I feel, or it’s going to have a far harder time of it than it deserves or Lufthansa Group itself would really like.